Prevailing wage law passed after Alabama workers built Northport VA

Posted by National Alliance for Fair Contracting on

By James T. Madore
Updated May 3, 2019 6:00 AM

The Northport VA Medical Center gave rise to the federal law stipulating that the prevailing wage be paid on federal building projects, according to historians and federal records.

The use of an out-of-state contractor and workers to construct the local hospital in the 1920s led Rep. Robert L. Bacon (R-Westbury) to propose what became the Davis-Bacon Act of 1931. The act is still in force, though it has been amended through the years. The hospital was in Bacon’s district.

Speaking at a 1927 congressional hearing, Bacon said several New York State contractors were outbid for the hospital’s construction because they included the state’s prevailing wage in their bids, which the successful bidder, from Alabama, had not done.

The out-of-state contractor “brought some thousand nonunion laborers from Alabama,” Bacon said. “They were herded onto this job, they were housed in shacks, they were paid a very low wage.”

He continued: “It seemed to me that the federal government should not engage in construction work in any state and undermine the labor conditions and the labor wages paid in that state. …The least the federal government can do is comply with the local standards of wages.”

Bacon’s bill languished until it was sponsored in the Senate by John Davis (R-Pennsylvania), a former labor secretary under three presidents, including Herbert Hoover. The bill was signed into law by Hoover in 1931.

More recently, opponents of the prevailing wage, such as columnist George F. Will, have asserted Bacon was upset because some of the workers on the Northport hospital’s construction were black. But neither he nor Davis spoke of race in the period leading up to the legislation’s overwhelming adoption, according to congressional records.

“For Bacon, the issue was not race,” economists Hamid Azari-Rad and Peter Philips said in “The Economics of Prevailing Wage Laws” (Ashgate, 2005). “The issue was that both black and white workers from Alabama were being paid very much less than the wage scale prevailing in New York.”

The original hospital buildings are no longer in use and will be demolished next year, a VA spokesman said.

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Mail haulers in Alabama owed $329,057 in back pay (AL)

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Posted Apr 22, 5:03 PM
By Leada Gore

A Florida-based contractor will pay back wages and benefits to postal delivery personnel in Montgomery.

The payment comes after an investigation into St. Augustine, Florida-based Postal Fleet Services Inc. by the U.S. Department of Labor’s Wage and Hour Division.

Postal Fleet Services will pay $329,057 in back wages and benefits to 53 employees for violations of requirements of the federal Fair Labor Standards Act and the McNamara-O’Hara Service Contract Act, the labor department said.

“No federal contractor should gain an economic advantage by paying employees below the prevailing wages and fringe benefits their contract requires,” said Wage and Hour Regional Administrator Juan Coria. “Federal service contracts spell out employers’ responsibilities when they bid on these jobs. Violations like these can be avoided.”

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County Supervisors Direct Staff to Develop Community Workforce Agreement for Construction Projects (CA)

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By Giana Magnoli
April 10, 2019 | 9:54 p.m.

Contractors from all over Santa Barbara County commented during Tuesday’s Board of Supervisors meeting on a proposal to develop a community workforce agreement ordinance, which would affect contracts for some government projects.

A community workforce agreement, also called a project labor agreement, is negotiated between public agencies and construction trade unions “with the goal of providing a stable, skilled workforce and high quality standards on publicly funded projects,” said county supervisors Joan Hartmann and Das Williams, who pitched the idea to their colleagues.

The supervisors voted 3-2 to direct staff to develop a community workforce agreement ordinance and come back with details at a later date….

The project labor agreement would have a “targeted hire provision” aimed at getting people from “disadvantaged communities” – low-income workers, veterans and others – into construction through apprenticeship training programs, according to the board letter from Hartmann and Williams.

Michael Lopez, of the Santa Barbara Plumbers and Pipefitters Local 114, said the Community Workforce Agreement would boost the efforts of apprenticeships and trained workers.

“This is how we want to take care of our local people,” Lopez said.

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San Diego airport officials vote to use PLA on $3B airport project (CA)

Posted by National Alliance for Fair Contracting on

AUTHOR – Kim Slowey
PUBLISHED – April 8, 2019

Dive Brief:

  • Board members of the San Diego County (California) Regional Airport Authority have voted to require that the design-build contractor chosen to lead the $3 billion redevelopment of San Diego International Airport must enter into project labor agreements with local unions.
  • The regulation requiring the PLAs, according to a staff-prepared report, “ensures labor harmony by eliminating the threat of work stoppages, strikes, slowdowns, and lockouts for the life of the project,” which, airport staff said, is a critical element for keeping the five-year project on schedule.

…

Dive Insight:

Also included in the staff report to the authority was the fact that California state law allows a public agency to require a PLA. Lawmakers in many other states, however, don’t. Last month, Kentucky became the 25th state to enact anti-PLA regulations mandated by state and local government agencies. Kentucky’s new law keeps its public agencies from requiring that bidders sign on to PLAs, although it does not ban the agreements altogether nor does it prevent contractors from entering into voluntary PLAs.

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Opinion: Criminalizing wage theft is only one step in the right direction (CO)

Posted by National Alliance for Fair Contracting on

APR 29, 2019 4:05AM MDT
Rebecca Galemba

A day worked is a day paid,” a day laborer in Lakewood, Colorado stated. But according to the Colorado Fiscal Institute (CFI), this is not the case for many Colorado workers. Each year, half a million Coloradans suffer from wage theft, amounting to $750 million a year, in addition to the associated $25 million to $47 million in lost state tax revenue and potential public services.

Wage theft refers to the denial of earned wages and benefits protected under state and federal labor laws. The CFI numbers are likely vast under-estimates due to underreporting and pervasive worker misclassification.

New legislation, like Colorado House Bill 1267, would recognize wage theft for the insidious, and often intentional, crime it is. This legislation would treat wage theft as “theft” so that the intentional withholding of wages over $2,000 would be considered a felony.

When employers get away with cheating their workers, it not only harms Colorado’s most vulnerable people, but also undermines wages and working conditions for all workers and creates unfair business advantages for unscrupulous employers. When penalties are low or not applied, committing wage theft is relatively low-risk, profitable, and normal.

Recognizing the crime of wage theft is a step forward in mitigating this unfair business practice. House Bill 1267 can pave the way for more proactive policies to target routine violators, ramp up public enforcement, enhance retaliation protections, monitor industries with pervasive violations and create partnerships to assist workers who may lack the ability to come forward in a claims-driven enforcement environment.

In Colorado, the construction sector accounts for the largest share of violations of the Fair Labor Standards Act; it is estimated that a third of workers in construction may be misclassified, leading employers to avoid obligations to their workers as well as payroll taxes. In my research survey of over 400 day laborers, we found that 62% of workers surveyed had experienced wage theft, but that only half ever pursued their unpaid wages.

Fewer than 40% asked for assistance even though an amendment to the Colorado Wage Claims Act, which went into effect in 2015, authorized the Colorado Department of Labor and Employment’s Division of Labor Standards and Statistics to adjudicate wage claims and levy fines and penalties to deter bad behavior regardless of a worker’s legal status.

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Wage-theft bill sparks debate about repeat offenders (IL)

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By Rebecca Anzel, Capitol News Illinois
Posted Apr 19, 2019 at 11:38 AM

Legislation that punishes employers in Illinois who short their workers’ pay left Republican representatives with open-ended questions about the bill’s impact on state businesses.

Proposed by Chicago Democratic Rep. Celina Villanueva, the House-approved measure enhances current penalties against companies convicted of wage theft – each day an employee’s paycheck is withheld would now be a separate felony offense instead of a misdemeanor.

Businesses would also be barred from working with the state of Illinois for five years.

“This proposal will help working families by ensuring that any business that is willfully withholding wages is held accountable,” Villanueva said.

But during floor debate, Republican representatives questioned whether Villanueva’s characterization of the bill accurately portrayed the practical effects it would have if passed into law.

Villanueva consistently said her bill targets “bad actors” who “repeatedly and willfully engage in wage theft.”

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Carpenters: Industry plagued by tax fraud (MA)

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Picketers aim illuminate illegal employment practices

By Mike LaBella
April 11, 2019

HAVERHILL – More than a dozen union carpenters, including members of New England Regional Council of Carpenters Local 339, stood at the corner in front of City Hall for several hours Thursday morning to illuminate what they claim is rampant tax fraud tainting the construction industry.

They held picket signs and banners bearing statements such as, “Tax fraud impacts me,” and “Construction industry tax fraud costs taxpayers over $80 per second and $2.6 billion per year.”

Organizers said the event was intended to educate the public on the magnitude of illegal construction employment practices, discuss their impact on Haverhill and Massachusetts, and call for a unified front against what they called an insidious activity. Similar events took place Thursday in Lynn, Framingham and Portland, Maine, they said.

…

Local 339 issued a statement saying that each year, labor brokers and contractors cheat their tax obligations by misclassifying their hires, such as classifying a carpenter as a laborer, and paying an estimated 1.2 million workers “off the books,” (also known as “under the table”), thereby robbing taxpayers of up to $2.6 billion through lost federal income, employment taxes, and state income taxes.

Union member Adam DiGiovanni of Haverhill said he is reaching out to city officials in hopes they will support the creation of an ordinance that would penalize an employer for engaging in unfair wage practices on large construction projects that involve taxpayer money, including projects that receive tax credits.

“Other communities have passed these kinds of ordinances, including Springfield, Quincy and Lynn,” he said. “There needs to be oversight as right now it’s a free for all.”

He said that such an ordinance would typically speak to large-scale commercial construction projects valued at $10 million or more, and typically not the “local home-builder market.”

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Union-backed budget amendment would combat construction wage theft in Massachusetts (MA)

Posted by National Alliance for Fair Contracting on

By Shira Schoenberg
Posted Apr 24, 4:55 PM

A union-backed amendment expected to be included in the Massachusetts House budget would increase the attorney general’s ability to enforce wage and hour laws in the construction industry.

Rep. Dan Cullinane, D-Boston, introduced an amendment that would spend $500,000 to create a specialized unit in the attorney general’s office to investigate and enforce wage violations in the construction industry.

“This underground economy is real,” Cullinane said. “Bad companies are stealing wages from workers, bad companies are pocketing taxpayer dollars by falsifying payroll records.”

Historically, the construction industry has had frequent occurrences of wage theft.

Attorney General Maura Healey, in a February report, said her office issued 165 civil citations against 66 construction companies in 2018 for wage violations. These companies paid fines of more than $1.23 million and restitution of $1.47 million for 1,030 employees.

Wage theft can include things like failing to pay overtime, failing to pay the required wage for public projects or not accurately documenting how many hours someone works.

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McGarvey of North American Building Trades Unions addresses MBTC convention (MA)

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April 19, 2019 – Construction Design & Engineering

Plymouth, MA The Massachusetts Building Trades Council (MBTC) unveiled its 2019 agenda to elevate the interests of construction workers and union contractors across the Commonwealth. The three-day convention was held at HOTEL 1620.

Sean McGarvey, president of North America’s Building Trades Unions (NABTC), served as keynote. McGarvey represents millions of workers from 14 national and international unions in the U.S. and Canada. He addressed hundreds of local labor leaders and delegates who made the trip to the town for the convention. The delegates at the convention came from 74 member locals, who together represent 75,000 men and women from across the Commonwealth.

The 2019 agenda discussion included policies around Apprenticeship & Training, providing career paths for more women & people of color, workplace safety, building more affordable housing, state and federal legislative priorities, and veteran employment.

Cracking down on the state’s wage theft epidemic remained a top concern, with MassBTC president Frank Callahan calling on the state legislature to provide additional funding for investigators within the Attorney General’s office. “Funds spent on wage enforcement more than pay for themselves in the form of taxes from recovered wages, and fines and penalties paid by the violators,” said Callahan. “Expanding wage enforcement personnel isn’t just the right thing to do, it’s an economically wise investment for taxpayers too.

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Public Work Contractors Should Check Their Payroll, Then Check it Twice… (MD)

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JD Supra
April 10, 2019

Maryland “public work” contractors and subcontractors better be checking their payroll, and then checking it twice, because Senate Bill (“SB”) 300 just came to town! Of course, this level of payroll diligence should already be the norm, but effective October 1, 2019, the stakes for certain public work contractors and subcontractors are just a little bit higher for those that fail to pay the appropriate Maryland prevailing wage rates. As a result, the legal process for their underpaid employees could move much faster.

For those less familiar with Maryland public work contracts, pursuant to Section 17-201(j)(1), “‘public work’ means a structure or work, including a bridge, building, ditch, road, alley, waterwork, or sewage disposal plant, that: (i) is constructed for public use or benefit; or (ii) is paid for wholly or partly by public money.” Notably, however, Maryland prevailing wage laws and the new changes for public work contracts do not apply to: (i) projects performed by a public service company under order of the Public Service Commission; (ii) certain elementary or secondary school projects for which less than 25% of the money used for construction is State money; (iii) certain other public work projects for which less than 50% of the money used for construction is State money; (iv) certain contracts where the contractor is already required to pay prevailing wage rates determined by the federal government; or (v) public works contracts valued at less than $500,000.00.

On March 28, 2019, the General Assembly of Maryland enacted certain new provisions in Section 17-224 of the State Finance and Procurement Article. These provisions allow employees of contractors and subcontractors working on eligible “public works” projects in Maryland, to the extent those employees are not paid the prevailing wage rate established by the Commissioner of Labor and Industry (the “Commissioner”), to immediately sue their employers for the difference between the prevailing wage rate and the amount actually received by the employees. Additionally, to the extent the employer is a subcontractor, both the contractor and subcontractor shall be jointly and severally liable for any violation of the subcontractor’s obligations under Section 17-224.

Under the old Section 17-224, employees were first required to file a complaint with the Commissioner to secure an order of restitution. Only after the employer failed to comply with the order could the Commissioner or the employee bring a civil action in circuit court to enforce the order. Further, the allegedly underpaid employee only had recourse against his or her employer, without an express right to recovery against upstream contractors.

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